SM Land, Inc. vs. Bases Conversion and Development Authority

G.R. No. 203655. March 18, 2015.
SM LAND, INC., petitioner, vs. BASES CONVERSION AND DEVELOPMENT AUTHORITY and ARNEL
PACIANO D. CASANOVA, ESQ., in his official capacity as President and CEO of BCDA, respondents.
Civil Law; Contracts; Words and Phrases; Article 1305 of the New Civil Code defines a contract as “a
meeting of minds between two (2) persons whereby one (1) binds himself, with respect to the other, to
give something or to render some service.”—Article 1305 of the New Civil Code defines a contract as “a
meeting of minds between two (2) persons whereby one (1) binds himself, with respect to the other, to
give something or to render some service.” It is a “juridical convention manifested in legal form, by
virtue of which one or more persons bind themselves in favor of another or others, or reciprocally, to
the fulfilment of a prestation to give, to do, or not to do.” The succeeding Article 1318 of the Code lays
down the essential requisites of a valid contract, to wit: (1) Consent of the contracting parties; (2) Object
certain which is the subject matter of the contract; and (3) Cause of the obligation which is established.
Same; Same; Consent; Words and Phrases; The first requisite, consent, is manifested by the meeting of
the offer and the acceptance upon the thing and the cause which are to constitute the contract.—The
first requisite, consent, is manifested by the meeting of the offer and the acceptance upon the thing and
the cause which are to constitute the contract. In the case at bar, when SMLI submitted the first
Unsolicited Proposal to BCDA on December 14, 2009, the submission constituted an offer to undertake
the development of the subject property. BCDA then entered into negotiations with SMLI until the BCDA
finally accepted the terms of the final unsolicited proposal. Their agreement was thereafter reduced into
writing through the issuance of the Certification of Successful Negotiations where the meeting of the
parties’ minds was reflected in this wise: NOW, THEREFORE, for and in consideration of the foregoing,
BCDA and SMLI have, after successful negotiations pursuant to Stage II of Annex C x x x, reached an
agreement on the purpose, terms and conditions on the JV development of the subject property, which
shall become the terms for the Competitive Challenge pursuant to Annex C of the JV Guidelines x x x.
Same; Same; Cause; Words and Phrases; Cause is the essential reason which moves the parties to enter
into the contract. It is the immediate, direct and proximate reason which justifies the creation of an
obligation through the will of the contracting parties.—Cause, on the other hand, is the essential reason
which moves the parties to enter into the contract. It is the immediate, direct and proximate reason
which justifies the creation of an obligation through the will of the contracting parties. Complementing
this is Article 1350 of the New Civil Code which provides that “[i]n onerous contracts the cause is
understood to be, for each contracting party, the prestation or promise of a thing or service by the
other.” As such, the cause of the agreement in the case at hand is their interest in the sale or acquisition
and development of the property and their undertaking to perform their respective obligations, among
others, as reflected in the Certificate of Successful Negotiations and in the Terms of Reference (TOR)
issued by BCDA.
Same; Same; Object Certain; Words and Phrases; Object certain refers to the subject matter of the
contract. It is the thing to be delivered or the service to be performed.—Object certain refers to the
subject matter of the contract. It is the thing to be delivered or the service to be performed. Here, when
the BCDA Board issued, on August 6, 2010, the Certification of Successful Negotiations, it not only
accepted SMLI’s Unsolicited Proposal and declared SMLI eligible to enter into the proposed JV activity. It
also “agreed to subject [SMLI]’s Original Proposal to Competitive Challenge pursuant to Annex C [of the
NEDA JV Guidelines], which competitive challenge process shall be immediately implemented following
the [TOR] Volumes 1 and 2.” Moreover, said Certification provides that “the BCDA shall, thus,
commence the activities for the solicitation for comparative proposals x x x starting on August 10, 2010,
on which date [SMLI] shall post the required Proposal Security x x x.”
Administrative Orders; Under the Administrative Code of 1987, acts of the President providing for rules
of a general or permanent character in implementation or execution of constitutional or statutory
powers shall be promulgated in Executive Orders (EOs).—Under the Administrative Code of 1987, acts of
the President providing for rules of a general or permanent character in implementation or execution of
constitutional or statutory powers shall be promulgated in Executive Orders (EOs). In other words, it is
through these orders that the President ensures that laws are faithfully executed, by handing out
instructions to subordinate executive officials and the public, in the form of implementing rules and
regulations, on how the law should be executed by subordinate officials and complied with by the
public.
Same; Delegation of Powers; Through Section 5 of Executive Order (EO) No. 109, Section 8 of EO No.
109-A and now Section 8 of EO No. 423, the President effectively delegated her inherent executive
power to issue rules and regulations on procurement to her subordinate executive officials, her alter
egos.—Amidst the changes effected on procurement rules, the NEDA’s duty to issue a JV Guidelines
under the said executive orders remained unaffected. Through Section 5 of EO No. 109, Section 8 of EO
No. 109-A and now Section 8 of EO No. 423, the President effectively delegated her inherent executive
power to issue rules and regulations on procurement to her subordinate executive officials, her alter
egos, the most recent of which reads in this wise: Section 8. Joint Venture Agreements.—The NEDA, in
consultation with the GPPB, shall issue guidelines regarding joint venture agreements with private
entities with the objective of promoting transparency, competitiveness, and accountability in
government transactions, and, where applicable, complying with the requirements of an open and
competitive public bidding. Pursuant to said repeated directives from no less than the Chief Executive,
the NEDA issued the JV Guidelines providing the procedures for the coagulation of joint ventures
between the government and a private entity. In this regard, attention must be drawn to the well-
established rule that administrative issuances, such as the NEDA JV Guidelines, duly promulgated
pursuant to the rule-making power granted by statute, have the force and effect of law.
Doctrine of Equitable Estoppel; The doctrine of equitable estoppel may be invoked against public
authorities as well as against private individuals.—Respondents cannot also find solace in the general
rule that the State is not barred by estoppel by the mistakes or errors of its officials or agents. As
jurisprudence elucidates, the doctrine is subject to exceptions, viz.: Estoppels against the public are little
favored. They should not be invoked except [in rare] and unusual circumstances, and may not be
invoked where they would operate to defeat the effective operation of a policy adopted to protect the
public. They must be applied with circumspection and should be applied only in those special cases
where the interests of justice clearly require it. Nevertheless, the government must not be allowed to
deal dishonorably or capriciously with its citizens, and must not play an ignoble part or do a shabby
thing; and subject to limitations . . ., the doctrine of equitable estoppel may be invoked against public
authorities as well as against private individuals. (emphasis added) Clearly, estoppel against the
government can be invoked in this case. This is in view of the fact that despite BCDA’s repeated
assurances that it would respect SMLI’s rights as an original proponent, and after putting the latter to
considerable trouble and expense, BCDA went back on its word to comply with its obligations under
their agreement and instead ultimately cancelled the same. BCDA’s capriciousness becomes all the more
evident in its conflicting statements as regards whether or not SMLI’s proposal would be advantageous
to the government.
Leonen, J., Dissenting Opinion:
Presidency; View that it would be a violation of the President’s oath and a grave abuse of discretion on
his part if, despite his knowledge, he disregards the irregularities, causing losses to the government.—
The President, who exercises control and supervision over respondent BCDA, should be able to correct
errors and address irregularities whenever they come to his attention. He took an oath to faithfully
execute our laws and to “consecrate [himself] to the service of the Nation.” Republic Act No. 7227
provides for our policy to enhance the benefits derived from respondent BCDA-administered properties.
Respondent BCDA’s projects should be implemented in a manner that would “maximize the use of
military camps[.]” It would be a violation of the President’s oath and a grave abuse of discretion on his
part if, despite his knowledge, he disregards the irregularities, causing losses to the government.
Inaction on his part is, in effect, allowing the government and the taxpayers to suffer the losses.
Civil Law; Contracts; View that respondent Bases Conversion and Development Authority (BCDA) has no
authority to agree to a provision that is inconsistent with law or public policy.—Even the government
may not renege on its contractual obligations. However, there was no clear contractual provision in this
case that could limit the President’s power to terminate the competitive challenge procedure.
Respondent BCDA’s acceptance letter of petitioner SMLI’s proposal, the Certificate of Successful
Negotiation, and the Terms of Reference contained no provision to that effect. Meanwhile, the
procedure for competitive challenge under Annex C of the Joint Venture Guidelines is a mere guideline.
It is not law. It is subject to modifications that should be consistent with law and public policy. It applies
only if the parties clearly and validly agreed to adopt competitive challenge as a procedure. Any
modification or contractual provision that is marred by any form of illegality will not vest any right.
Respondent BCDA has no authority to agree to a provision that is inconsistent with law or public policy.
Competitive Challenge; View that competitive challenge may apply if there are no other parties
interested in the government property or if there is a great need to attract the interest of private sector
entities.—We are not saying that government properties can be disposed exclusively through public
bidding. We are saying that this is the general rule, and other processes are exceptions. Competitive
challenge may apply if there are no other parties interested in the government property or if there is a
great need to attract the interest of private sector entities. It may also apply if there is a clear showing
that it would be the process that would provide more benefits to the government. The figures above
show that competitive challenge would not be the most beneficial in this case. Proceeding with the less
advantageous procedure would diminish the benefits that may be obtained for legitimate government
purposes.
MOTION FOR RECONSIDERATION of a decision of the Supreme Court.
The facts are stated in the resolution of the Court.
Puno & Puno for petitioner SM Land, Inc.
Julio Ma. Edmundo D. Maningat for intervenors DND and AFP.
RESOLUTION
VELASCO, JR., J.:
For reconsideration is the Decision of this Court dated August 13, 2014, which granted the petition for
certiorari filed by SM Land, Inc. (SMLI) and directed respondent Bases Conversion Development
Authority (BCDA) and its president to, among other things, subject SMLI’s duly accepted unsolicited
proposal for the development of the Bonifacio South Property to a competitive challenge.
The gravamen of respondents’ motion is that BCDA and SMLI do not have a contract that would bestow
upon the latter the right to demand that its unsolicited proposal be subjected to a competitive
challenge. Assuming arguendo the existence of such an agreement between the parties, respondents
contend that the same may be terminated by reasons of public interest.
We are not convinced.

There exists a valid agreement
between SMLI and BCDA
Article 1305 of the New Civil Code defines a contract as “a meeting of minds between two persons
whereby one binds himself, with respect to the other, to give something or to render some service.” It is
a “juridical convention manifested in legal form, by virtue of which one or more persons bind
themselves in favor of another or others, or reciprocally, to the fulfilment of a prestation to give, to do,
or not to do.”1 The succeeding Article 1318 of the Code lays down the essential requisites of a valid
contract, to wit:
(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract; and
(3) Cause of the obligation which is established.
In the case at bar, there is, between BCDA and SMLI, a perfected contract — a source of rights and
reciprocal obligations on the part of both parties. Consequently, a breach thereof may give rise to a
cause of action against the erring party.
The first requisite, consent, is manifested by the meeting of the offer and the acceptance upon the thing
and the cause which are to constitute the contract.2 In the case at bar, when SMLI submitted the first
Unsolicited Proposal to BCDA on December 14, 2009, the submission constituted an offer to undertake
the development of the subject property. BCDA then entered into negotiations with SMLI until the BCDA
finally accepted the terms of the final unsolicited proposal.3 Their agreement was thereafter reduced
into writing through the issuance of the Certification of Successful Negotiations
WHEREAS, pursuant to the authorization granted by the Board and issued pursuant to Annex “C,” Part
III, Stage One of the JV Guidelines, BCDA went into detailed negotiations with SMLI. The JV-SC
simultaneously ascertained the eligibility of SMLI in accordance with Annex “C,” Part III, Stage 2(2) of the
JV Guidelines x x x.] (emphasis ours) where the meeting of the parties’ minds was reflected in this wise:
NOW, THEREFORE, for and in consideration of the foregoing, BCDA and SMLI have, after successful
negotiations pursuant to Stage II of Annex C x x x, reached an agreement on the purpose, terms and
conditions on the JV development of the subject property, which shall become the terms for the
Competitive Challenge pursuant to Annex C of the JV Guidelines x x x.4 (emphasis ours)
Then, to manifest their assent to the terms thereof and their respective obligations, both parties —
BCDA and SMLI, represented by Gen. Narciso L. Abaya and Ms. Ana Bess Pingol, respectively — affixed
their signatures on the Certification of Successful Negotiations and had it notarized on August 6, 2010.
Cause, on the other hand, is the essential reason which moves the parties to enter into the contract. It is
the immediate, direct and proximate reason which justifies the creation of an obligation through the will
of the contracting parties.5 Complementing this is Article 1350 of the New Civil Code which provides
that “[i]n onerous contracts the cause is understood to be, for each contracting party, the prestation or
promise of a thing or service by the other.” As such, the cause of the agreement in the case at hand is
their interest in the sale or acquisition and development of the property and their undertaking to
perform their respective obligations, among others, as reflected in the Certificate of Successful
Negotiations and in the Terms of Reference (TOR) issued by BCDA.
Lastly, object certain refers to the subject matter of the contract. It is the thing to be delivered or the
service to be per-
formed.6 Here, when the BCDA Board issued, on August 6, 2010, the Certification of Successful
Negotiations,7 it not only accepted SMLI’s Unsolicited Proposal and declared SMLI eligible to enter into
the proposed JV activity. It also “agreed to subject [SMLI]’s Original Proposal to Competitive Challenge
pursuant to Annex C [of the NEDA JV Guidelines], which competitive challenge process shall be
immediately implemented following the [TOR] Volumes 1 and 2.”8 Moreover, said Certification provides
that “the BCDA shall, thus, commence the activities for the solicitation for comparative proposals x x x
starting on August 10, 2010, on which date [SMLI] shall post the required Proposal Security x x x.”9
The elements of a valid contract being present, there thus exists between SMLI and BCDA a perfected
contract, embodied in the Certification of Successful Negotiations, upon which certain rights and
obligations spring forth, including the commencement of activities for the solicitation for comparative
proposals. Thus, as evinced in the Certification of Successful Negotiation:
BCDA and SMLI have agreed to subject SMLI’s Original Proposal to Competitive Challenge pursuant to
Annex C – Detailed Guidelines for Competitive Challenge Procedure for Public-Private Joint Ventures of
the NEDA JV guidelines, which competitive challenge process shall be immediately implemented
following the Terms of Reference (TOR) Volumes 1 and 2.10 x x x
This agreement is the law between the contracting parties with which they are required to comply in
good faith.11 Verily, it is BCDA’s subsequent unilateral cancellation of this perfected contract which this
Court deemed to have been tainted with grave abuse of discretion. BCDA could not validly renege on its
obligation to subject the unsolicited proposal to a competitive challenge in view of this perfected
contract, and especially so after BCDA gave its assurance that it would respect the rights that accrued in
SMLI’s favor arising from the same.12
The NEDA JV Guidelines has
the force and effect of law
Aside from the agreement between the parties, the ruling in favor of SMLI is likewise based on the NEDA
JV Guidelines. As mandated by the rules, the Joint Venture activity, upon the successful completion of
the detailed negotiation phase, shall be subjected to a competitive challenge.13 While it is not disputed
that respondents failed to comply with the pertinent provisions of the NEDA JV Guidelines, the dissent
postulates that it is justifiable since it is a mere guideline and not law.14
We regretfully disagree.
Under the Administrative Code of 1987,15 acts of the President providing for rules of a general or
permanent character in implementation or execution of constitutional or statutory powers shall be
promulgated in Executive Orders (EOs).16 In other words, it is through these orders that the President
ensures that laws are faithfully executed, by handing out instructions to subordinate executive officials
and the public, in the form of implementing rules and regulations, on how the law should be executed
by subordinate officials and complied with by the public.17
For government contracts and procurement in the Philippines, then President Gloria Macapagal-Arroyo,
adopting the recommendation of the NEDA, issued EO No. 10918 on May 27, 2002. As its title indicates,
EO No. 109 streamlined the rules and procedures on the review and approval of all contracts of
departments, bureaus, offices and agencies of the government, including government-owned and -
controlled corporations and their subsidiaries. This executive issuance was, however, later amended by
EO No. 109-A,19 to conform to RA No. 9184 which was enacted barely two months after the issuance of
EO No. 109.20 Two years later, or on April 30, 2005, EO No. 42321 was issued, repealing EO No. 109-A
and simplifying the procurement process. Section 4 of EO No. 423 was later amended by EO No. 645.22
Amidst the changes effected on procurement rules, the NEDA’s duty to issue a JV Guidelines under the
said executive orders remained unaffected.23 Through Section 5 of EO
No. 109, Section 8 of EO No. 109-A and now Section 8 of EO No. 423, the President effectively delegated
her inherent executive power to issue rules and regulations on procurement to her subordinate
executive officials,24 her alter egos, the most recent of which reads in this wise:
Section 8. Joint Venture Agreements.—The NEDA, in consultation with the GPPB, shall issue
guidelines regarding joint venture agreements with private entities with the objective of promoting
transparency, competitiveness, and accountability in government transactions, and, where applicable,
complying with the requirements of an open and competitive public bidding.
Pursuant to said repeated directives from no less than the Chief Executive, the NEDA issued the JV
Guidelines providing the procedures for the coagulation of joint ventures between the government and
a private entity. In this regard, attention must be drawn to the well-established rule that administrative
issuances, such as the NEDA JV Guidelines, duly promulgated pursuant to the rule-making power
granted by statute, have the force and effect of law.25 As elucidated in the August 13, 2014 Decision:
x x x Being an issuance in compliance with an executive edict, the NEDA JV Guidelines, therefore, has the
same binding effect as if it were issued by the President himself, who parenthetically is a member of
NEDA. As such, no agency or instrumentality covered by the JV Guidelines can validly deviate from the
mandatory procedures set forth therein, even if the other party acquiesced therewith or not.26
Articles III(4) and VIII(3) only refer to Private Sector Entities (PSEs), effectively excluding the Original
Proponent

The dissent would next draw our attention to Articles III (on General Information) and VIII (on
Qualifications and Waivers) of the TOR Volume 1, which read:
III. GENERAL INFORMATION
x x x x
4. Amendment of these TOR. The information and/or procedures contained in these TOR may be
amended or replaced at any time, at the discretion of the BCDA Board, without giving prior notice or
providing for any reason. Should any of the information and/or procedures contained in these TOR be
amended or replaced, the JV-SC shall inform and send Supplemental Notices to all PSEs x x x 27
x x x x
VIII. QUALIFICATIONS AND WAIVERS
3. BCDA further reserves the right to call off this disposition prior to acceptance of the proposal(s) and
call for a new disposition process under amended rules, and without any liability whatsoever to any or
all of the PSEs, except the obligation to return the Proposal Security.28 (emphasis added)
_______________
26 Rollo, p. 988.
27 Id., at p. 78.
28 Id., at p. 87 [Article VIII (Qualifications and Waivers), Terms of Reference Volume 1].
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SM Land, Inc. vs. Bases Conversion and Development Authority
On this point, it is well to emphasize that the TOR containing the said provisions details the
requirements for eligibility to qualify as a PSE that may submit its technical and financial proposals for
the JV, and does not encompass the entire Swiss Challenge procedure. This is bolstered by the
provisions’ perfect consonance with the procedure for Stage Three per Annex C of the Guidelines, thus:
3. The Private Sector Entity shall post the proposal security at the date of the first day of the
publication of the invitation for comparative proposals in the amount and form stated in the tender
documents.
4. The procedure for the determination of eligibility of comparative proponents/private sector

participants, issuance of supplemental competitive selection bulletins and preselection conferences,
submission and receipt of proposals, opening and evaluation of proposals shall follow the procedure
stipulated under Annex A hereof. In the evaluation of proposals, the best offer shall be determined to
include the original proposal of the Private Sector Entity. If the Government Entity determines that an
offer made by a comparative private sector participant other than the Original Proponent is superior or
more advantageous to the government than the original proposal, the Private Sector Entity who
submitted the original proposal shall be given the right to match such superior or more advantageous
offer within thirty (30) calendar days from receipt of notification from the Government Entity of the
results of the competitive selection. Should no matching offer be received within the stated period, the
JV activity shall be awarded to the comparative private sector participant submitting the most
advantageous proposal. If a matching offer is received within the prescribed period, the JV activity shall
be awarded to the Original Proponent. If no comparative proposal is received by the Government Entity,
the JV activity shall be immediately awarded to the original private sector proponent.
628
628
SUPREME COURT REPORTS ANNOTATED

Pursuant to the above quoted provisions from the NEDA JV Guidelines, the interested PSEs, in order to
be able to participate in the competitive challenge, must first post their respective proposal securities
before submitting their comparative proposals for evaluation and consideration. Consequently, per the
reservation clause, should the government entity (GE) decide to make material changes in the TORs
issued, it must do so before it accepts the comparative proposals from the interested PSEs. This deadline
is intended to protect the participating PSEs from alterations in the benchmarks set forth in the TOR
after their proposals have already been seen and reviewed by the GE. Furthermore, should
modifications be validly made, such may affect the computation for the amount of the proposal security
to be posted by the comparative proponents,29 hence the need for the GE to return the PSEs’ proposal
securities should it decide to pre-terminate the competitive challenge.
As to SMLI’s proposal security, suffice it to state that it is not covered by the clauses — hence will not be
returned even if the competitive challenge is terminated — because SMLI cannot be considered as a PSE
within the context of the TOR and the JV Guidelines.
It must be emphasized that while an Original Proponent necessarily comes from the private sector, the
term “Private Sector Entity” has a definite meaning in the Swiss Challenge procedure. Under the TOR, a
“Private Sector Entity” means “the party/ies that shall have submitted proposals in compliance with the
requirements specified in Article V, Volume 1 of these TOR for the privatization and development of the
property.”30 On the other hand, under the same document, an “Original Proponent” means “SMLI,
whose unsolicited proposal for the development
_______________
29 See schedule for determination of the amount of the proposal security, Section VI, Item 1.a.6., Annex
A, NEDA JV Guidelines.
30 Rollo, p. 77.
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and privatization of [the] subject Property through JV with BCDA has been accepted by the latter,
subject to certain conditions, and is now being subjected to a competitive challenge.”31
To be sure, the Original Proponent, as duly noted in the assailed Decision herein, is bestowed several
rights under the JV Guidelines, including the right to the conduct and completion of a competitive
challenge and the right to match a superior or more advantageous offer, among others. As such, it is
clear that SMLI, being the Original Proponent, cannot be considered as a Private Sector Entity to which
the reservation clause applies.
Moreover, pertinent to our reading of the above cited provisions in the TOR is Article 1373 of the Civil
Code, which provides that “[i]f some stipulation of any contract should admit of several meanings, it
shall be understood as bearing that import which is most adequate to render it effectual.” For this
purpose, an interpretation which renders every word operative is preferred over that which makes
some words idle and nugatory.
Applying the doctrine in the case at bar, a contrary reading — that the adverted provisions in the TOR
entitle BCDA to cancel the entire Swiss Challenge — would violate the NEDA JV Guidelines, which, as
earlier explained, has the force and effect of law. As elucidated in the main Decision:
A review of the outlined three-stage framework reveals that there are only two occasions where
pretermination of the Swiss Challenge process is allowed: at Stage One, prior to acceptance of the
unsolicited proposal; and at Stage Two, should the detailed negotiations prove unsuccessful. In the Third
Stage, the BCDA can no longer withdraw with impunity from conducting the Competitive Challenge as it
became ministerial for the agency to commence and complete the same. Thus,
_______________
31 Id., at p. 76.
630
630
acceding to the interpretation of the TOR offered by BCDA will, in effect, result not only in the alteration
of the agreement between the parties but also of the NEDA JV Guidelines itself, both of which has the
force and effect of law.
The interpretation offered by BCDA is, therefore, unacceptable. Between procedural guidelines
promulgated by an agency pursuant to its rule-making power and a condition unilaterally designed and
imposed for the implementation of the same, the former must prevail. BCDA does not wield any rule-
making power such that it can validly alter or abandon a clear and definite provision in the NEDA JV
Guidelines under the guise of a condition under the TOR. As We have time and again harped, the ones
duty-bound to ensure observance with laws and rules should not be the ones to depart therefrom. A
contrary rule would open the floodgates to abuses and anomalies more detrimental to public interest.
For how can others be expected to respect the rule of law if the very persons or entities tasked to
administer laws and their implementing rules and regulations are the first to violate them, blatantly or
surreptitiously?
Estoppel can be invoked
against herein respondents
Respondents cannot plausibly shift the blame on what it perceived to be a bad bargain on the previous
administration by arguing that the latter was negligent in its actions or that it entered into questionable
transactions, for as can be gleaned, the negotiations and agreement between BCDA and SMLI was
authorized by the BCDA’s Board through Resolution No. 2010-05-100. Acting as a collegial body, the
BCDA’s Board could still validly authorize its president to enter into transactions over the protestation of
some of its members through a democratic vote.
Respondents cannot also find solace in the general rule that the State is not barred by estoppel by the
mistakes or
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errors of its officials or agents. As jurisprudence elucidates, the doctrine is subject to exceptions, viz.:
Estoppels against the public are little favored. They should not be invoked except [in rare] and unusual
circumstances, and may not be invoked where they would operate to defeat the effective operation of a
policy adopted to protect the public. They must be applied with circumspection and should be applied
only in those special cases where the interests of justice clearly require it. Nevertheless, the government
must not be allowed to deal dishonorably or capriciously with its citizens, and must not play an ignoble
part or do a shabby thing; and subject to limitations . . ., the doctrine of equitable estoppel may be
invoked against public authorities as well as against private individuals.32 (emphasis added)
Clearly, estoppel against the government can be invoked in this case. This is in view of the fact that
despite BCDA’s repeated assurances that it would respect SMLI’s rights as an original proponent, and
after putting the latter to considerable trouble and expense, BCDA went back on its word to comply with
its obligations under their agreement and instead ultimately cancelled the same. BCDA’s capriciousness
becomes all the more evident in its conflicting statements as regards whether or not SMLI’s proposal
would be advantageous to the government. As enunciated in the assailed Decision:
Noticeably, in its November 8, 2010 Memorandum, the BCDA posited that competitive challenge is more
advantageous to the government than straight bidding, to wit:
_______________
32 Republic v. Court of Appeals, G.R. No. 116111, January 21, 1999, 301 SCRA 366.
632
632
The price of the Bonifacio South properties has already been set by the winning price in the bidding for
the joint venture development of the JUSMAG property (P31,111/sq.m.). Thus, BCDA has established
the benchmark for the price of the remaining Bonifacio South properties, of which the JUSMAG property
is the most prime. Logically the minimum bid price under straight bidding for the BNS/PMC/ASCOM/SSU
property, which is a far less inferior property, would be P31,111/sq.m. However, with SM’s submission
of a revised unsolicited proposal at P31,732/sq.m. and later further revised to P32,500/sq.m., BCDA saw
the opportunity to negotiate for better terms and eventually arrived at a higher price of P36,900/sq.m.
In this case, BCDA deemed that going into Competitive Challenge was more advantageous to the
government than Competitive Selection (straight bidding) because of the opportunity to increase the
price.
Furthermore, subjecting the price to subsequent price challenge will possibly drive up the price even
higher than P38,900/sq.m. These opportunities cannot be taken advantage of under a straight bidding
where failure of bidding would likely ensue if in case BCDA immediately sets the price of the property
too high. The competition in the real estate industry and as experienced by BCDA is such that the other
developers will usually challenge the original proposal to “up the ante” as they cannot allow the original
proponent to get the property easily.
Despite this testament, the BCDA, over a year later, made a complete turnaround stating that straight
bidding will be best for the Government. As can be gleaned from the BCDA’s Memorandum to the
President
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dated February 13, 2012, respondents themselves recommended to the President that the selection
proceedings be terminated. To reiterate:
In view of the foregoing, may we respectfully recommend the President’s approval for BCDA to
terminate the proceedings for the privatization and development of the BNS/PMC/ASCOM/SSU
Properties in Bonifacio South through Competitive Challenge and proceed with the bidding of the
property.
The BCDA offered no explanation to reconcile its opposing positions. It also neglected to inform SMLI of
the provisions in its proposal that it deemed disadvantageous to the government. x x x
Respondents harp on the alleged dubiousness of the proceeding that led to the perfection of the
agreement, but to rule now that irregularities marred the actions of BCDA’s board and officers, as
respondents would have us believe, would be tantamount to prematurely exposing its former officers to
potential administrative liability without due process of law. If respondent would insist on such
argument, it could have at least shown that the proper disciplinary cases have been initiated as evidence
that BCDA reasonably believed that its previous officers indeed deviated from lawful procedure.

The perceived government
losses remain speculative
The alleged adverse economic impact on the government, in finding for SMLI, does not constitute, under
the premises, a valid cause for the reversal of the assailed Decision. To clarify, Our ruling did not award
the project in petitioner’s favor but merely ordered that SMLI’s proposal be subjected to a competitive
challenge. Consequently, any alleged disadvantage the government would suffer is speculative at most
as there is no final award for the project as of yet.
634
634
Lest it be misunderstood, the perceived low floor price for the project, based on SMLI’s proposal,
remains just that — a floor price. There is, thus, an opportunity to increase the price, the government
share as it were, through competitive challenge, as respondents themselves previously observed. Such
offers can even surpass the property’s current market value and, in which case, constitute sufficient
consideration for the project. Without first subjecting SMLI’s proposal to a competitive challenge, no bid
can yet be obtained from PSEs and, corollarily, no determination can be made at present as to whether
or not the final bid price for the project is, indeed, below the property’s fair market value.
Public bidding may generally be more preferred than a competitive challenge for reasons explained in
the dissent. However, there must be a careful balance between what is best for the government and
what is fair to the persons it deals with. Otherwise, any and all unsolicited proposal can be cancellable,
despite its acceptance, by the mere allegation that straight bidding is what public interest so requires.
Worse, the government can very well ignore, at will, its contractual obligations by invoking that familiar
mantra –– public interest.
To be sure, the government has not strayed from accepting suo moto proposals from private entities
and subjecting said proposals to a Swiss Challenge. In fact, the recent “Price Challenge” as regards Metro
Pacific Investment Corporation’s (MPIC’s) proposal for the expansion of the North Luzon Expressway as
well as its integration with the Subic-Clark-Tarlac Expressway was undertaken by none other than BCDA
itself.33 Thereafter, the BCDA board, in its February 4, 2015 meeting, adopted the result of the
concluded Price Challenge, wherein no firm has tried to match MPIC’s proposal, and, consequently,
approved the notice of award in the com-
_______________
33 The Philippine Star, February 2, 2015, B-9.
635
VOL. 753, MARCH 18, 2015
635
pany’s favor.34 Curiously enough, if straight bidding is, indeed, more beneficial, more transparent, and
would yield a better offer for the government, then there is no reason for respondents not to have
cancelled the process instead of awarding the project to MPIC. Otherwise stated, if public interest
requires the conduct of a straight bidding instead of a Swiss Challenge, then MPIC can never rest easy,
thinking the contract it entered into with the government can be terminated at any time.
It is, thus, recognized that there are instances wherein the agreement stemming from faithful
negotiations of the parties should be upheld, especially so when, as in this case, the alleged adverse
effects on the government remain speculative at best. Respondents should, therefore, honor its
commitment with petitioner, not as a message conveying the coddling of PSEs, and not only pursuant to
its contractual and legal obligations under the TOR and the NEDA JV Guidelines, but also as a balancing
mechanism between the tangible benefits the government stands to reap in terms of contract
consideration, and its intangible benefits including improved public confidence in the government in
terms of ease of doing business with. Moreover, and guilty of reiteration, it is worth emphasizing that
SMLI’s offer, which was duly accepted by the BCDA, only serves as the floor price and does not foreclose
better offers that can even surpass the property’s current market value. This being said, the government
is not without protection for it is not precluded from availing of safeguards and remedies it is entitled to
after soliciting comparative proposals, as provided under the TOR and the NEDA JV Guidelines.
WHEREFORE, in view of the foregoing, the Court’s August 13, 2014 Decision is hereby AFFIRMED.
Respondents’ Motion for Reconsideration is accordingly DENIED with FINALITY.
_______________
34 The Manila Bulletin, February 7, 2015, B-3.
636
636
No further pleadings, motions, letters or other communications shall be entertained in this case. Let
entry of judgment be issued.
SO ORDERED.
Peralta and Mendoza, JJ., concur.
Villarama, Jr., J., I join J. Leonen in his Dissent.
Leonen, J., I dissent. See Separate Opinion.

DISSENTING OPINION
LEONEN, J.:
I dissent.
There was no valid agreement that gave petitioner SM Land, Inc. (petitioner SMLI) a right to a completed
competitive challenge. Respondent Bases Conversion and Development Authority (respondent BCDA)
did not and may not give consent to any provision that limits the process for selecting respondent
BCDA’s joint venture partner to competitive challenge especially when it was shown that such process
would be against public interest.
The Certificate of Successful Negotiation1 and the Terms of Reference2 do not show a clear meeting of
the minds to limit the whole selection process to a completed competitive challenge. While these
documents state that petitioner SMLI and respondent BCDA had “reached an agreement on the
purpose, terms and conditions on the [joint venture] development . . . which shall become the terms for
the Competitive Challenge[,]”3 respondent BCDA did not make a binding commitment to enter into a
joint venture agreement with petitioner
_______________
1 Rollo, pp. 64-72.
2 Id., at pp. 74-88.

3 Id., at p. 65.
637
VOL. 753, MARCH 18, 2015
637
SMLI or to limit the selection process to a completed competitive challenge. The Certificate of Successful
Negotiation was worded in a manner that implied that the terms agreed upon by petitioner SMLI and
respondent BCDA shall apply only if they decided to proceed with the joint venture development and
the competitive challenge.4
Similarly, the Terms of Reference contained no such commitment. It only described the competitive
challenge procedure should both parties decide to proceed with it. It even contained provisions that
confirmed respondent BCDA’s authority to reconsider and terminate the selection process and later
adopt other selection processes.
III. GENERAL INFORMATION
....
4. Amendment of these TOR. The information and/or procedures contained in these TOR may be
amended or replaced at any time, at the discretion of the JV-SC, subject to the approval/confirmation of
the BCDA Board, without giving prior notice or providing any reason. Should any of the information
and/or procedures contained in these TOR be amended or replaced,
_______________
4 Id., at pp. 64-65.

Certification of Successful Negotiation
....
NOW THEREFORE, for and in consideration of the foregoing, BCDA and SMLI have, after successful
negotiations pursuant to Stage II of Annex C – Detailed Guidelines for Competitive Challenge Procedure
for Public-Private Joint Ventures of the NEDA JV Guidelines, reached an agreement on the purpose,
terms and conditions on the JV development of the subject property, which shall become the terms for
the Competitive Challenge pursuant to Annex C of the JV Guidelines, as follows: . . . . (Emphasis
supplied)
638
638
the JV-SC shall inform and send Supplemental Notices to all PSEs. . . .
....
VIII. QUALIFICATIONS AND WAIVERS
....
3. BCDA further reserves the right to call off this disposition prior to acceptance of the proposal(s) and
call for a new disposition process under amended rules, and without any liability whatsoever to any or
all the PSEs, except the obligation to return the Proposal Security.5 (Emphasis supplied)

Petitioner SMLI cannot invoke the principle of estoppel against respondent BCDA. This is not just
because of the principle that the government is not bound by its agents’ mistakes. This is because the
principle of estoppel presupposes that false representations were made — which is not the case. The
Certificate of Successful Negotiation and the Terms of Reference do not state that respondent BCDA
shall limit the process of selecting the joint venture partner to a completed competitive challenge. The
existence of qualifications and waivers in the Terms of Reference further negates allegations that there
was such a representation.
However, even granting that there was such representation, respondent BCDA was not acting out of
capriciousness when it decided to terminate the competitive challenge. It terminated the competitive
challenge because petitioner SMLI’s offer was incompatible with public interest and, therefore, void.
Moreover, the whole process that led to the issuance of a Certificate of Successful Negotiation was
highly irregular.
_______________
5 Id., at pp. 77-87.
639
VOL. 753, MARCH 18, 2015
639
Respondents BCDA and its President, Arnel Paciano D. Casanova (Casanova), point to the alleged
dubious process that led to the naming of petitioner SMLI as the original proponent. They formally
submit that as much as P13 billion pesos may be lost to the government.6
According to respondents BCDA and Casanova, the Joint Venture Selection Committee’s
recommendation and BCDA Board’s approval of using competitive challenge, instead of the usual public
bidding process,7 are themselves questionable. Respondents BCDA and Casanova cited the April 28,
2010 minutes of respondent BCDA’s special Board meeting to show that the choice of disposition
process had already been a concern within respondent BCDA even before petitioner SMLI was declared
the original proponent:
5.1.3. Vice Chairman Abaya expressed concern that BCDA might be questioned later on why it opted
to go via Annex ‘C’ and not the Annex ‘A’ mode of disposition. In order to justify BCDA going via Annex
‘C’ mode, it should be made clear to the interested proponents that there are already offers higher than
the JUSMAG property. . . .8
_______________
6 Id., at p. 1049. Respondents BCDA and Casanova stated in their Motion to Resolve with Motion for
Reconsideration that:
The proposal of SMLI juxtaposed with the Cuervo appraisal shows the relative value of the offer vis-à-vis
market prices to be as follows:
7 Exec. Order No. 62 (1993) provides that “[a]s a general rule, the privatization process should be
conducted through public bidding.”
8 Rollo, p. 1040.
640
640
Petitioner SMLI was not the first developer that submitted a proposal to respondent BCDA. Robinsons
Land Corporation had submitted its proposal as early as October 8, 2009 or more than two (2) months
before petitioner SMLI submitted its initial proposal of P16,350.00/square meter on December 14,
2009.9 Both proposals were already rejected by respondent BCDA for noncompliance with the set
parameters for disposition.10 Instead of terminating the disposition through competitive challenge,
however, the Joint Venture Selection Committee “remained in contact with the proponents and even
actively solicited their submission of ‘Unsolicited Proposals.’”11 This, respondents BCDA and Casanova
argue, gave Robinsons Land Corporation and petitioner SMLI “. . . an unfair advantage over all other
developers as it effectively limited the selection process to the two invitees.”12
Respondents BCDA and Casanova also implied that there was an irregularity when the Joint Venture
Selection Committee was able to make an evaluation and come up with a recommendation only within
three hours from petitioner SMLI’s submission of its unsolicited proposal:
DEAL RUSHED DURING THE ELECTION PERIOD
On 4 May 2010, merely six days before the Presidential Elections, SMLI submitted its 3 May 2010
Unsolicited Proposal to BCDA. This Unsolicited Proposal was opened at 9:00 a.m. during the BCDA
Business Development Board Committee Meeting in the presence of SMLI representatives. The 3 May
2010 Unsolicited Proposal was thereafter forwarded to BCDA’s Reception Desk where it was stamped as
having been received at 9:25
_______________
9 Id., at pp. 1039 and 1048.

10 Id., at p. 1040.
11 Id., at p. 1041.
12 Id.
641
VOL. 753, MARCH 18, 2015
641
a.m. and then endorsed for inclusion in the Agenda of the BCDA Board Meeting set at 12:00 noon of the
same day.
In a span of about three hours, the JV-SC received, opened, evaluated and recommended the
acceptance of SMLI’s Unsolicited Proposal for the privatization and development of the 33.1 hectare
subject Property for Php32,501/sq. m. in Net Present Value (NPV) using a 10% discount rate; and the
pursuit of detailed negotiations on the terms and conditions of the Joint Venture under Annex “C” of the
NEDA JV Guidelines. This circumstance was not lost to some BCDA Directors. As reflected in the Minutes
of the Board Meeting:
5.2.23. Director Sangil said that the Board was only given a few hours to evaluate the revised proposal
by SLI, considering that copies of the same were given only shortly before the Board Meeting started. As
such, the Board may not be able to come up with a wise decision on the matter.13 (Emphasis and
underscoring in the original, citations omitted)

Respondents BCDA and Casanova also mentioned that before the issuance of a Certificate of Successful
Negotiation, there had been concerns about the disregard of other more favorable offers to the
government for the property. Respondent BCDA quoted a letter from Ayala Land, Inc.:
We now formally request that you reconsider your decision and conduct a bidding for the property
consistent with the precedent set by BCDA for the Bonifacio South lots with its disposition of the
JUSMAG site in February on account of its receipt of a number of offers from various proponents
including ours. We believe that BCDA should pursue the best price for the property to
_______________
13 Id., at p. 1042.
642
642
uphold public interest and avoid the loss of public funds and revenues. The sudden change in BCDA’s
disposition mode as our government transcends to a new administration might also be questionable.14
Respondents BCDA and Casanova also quoted the July 20, 2010 minutes of the regular BCDA Board
meeting, showing the same concerns from some BCDA directors over the disposition of the property:
4.4.31. Director Valencia recalled that in the disposition of the JUSMAG property, the Board could not
decide on whether or not to declare ALI as the original proponent. However, subsequent proposals
came along which compelled BCDA to dispose of the property through public bidding over a period of
two years. Given this example, he suggested that the Board could perhaps defer its decision on the
matter until such time that the new administration appoints new BCDA Board Members. He also
expressed his concern about the ALI letter which alleges that the BCDA’s mode of disposition might be
questionable.
....
4.4.40 Director Valencia said that the ALI offer for the subject property was reduced to its present value,
same with the SMLI offer. Regardless of the underlying assumptions for the offers, the value of the
property is the same and the peso represented today is the same as that being represented by other
proponents. Given this fact, it is prudent for BCDA to wait until new BCDA Directors are appointed by
the new administration to avoid the suspicion that BCDA is rushing the disposition of the subject
property.
_______________
14 Id., at p. 1043.
643
VOL. 753, MARCH 18, 2015
643
....
4.4.52 Director Seno suggested the possibility of elevating the matter to the Office of the President (OP)
as far as the Board’s decision is concerned, explaining the process involved and the actions of the Board
every step of the way. The professionalism of the BCDA Board will be questioned if it does not exercise
prudence on the matter.15 (Underscoring in the original)
Instead of deciding whether to declare Ayala Land, Inc. as the original proponent, the Joint Venture
Selection Committee asked petitioner SMLI to give an offer that was better than Ayala Land, Inc.’s.
Petitioner SMLI submitted its improved offer. The BCDA Board of Directors, upon recommendation of
the Joint Venture Selection Committee, declared petitioner SMLI as the original proponent.16
These are allegations of possible irregularities that should not be dismissed so easily. They involve the
conduct of persons entrusted to operate respondent BCDA. They also involve the government’s and our
taxpayers’ money.
The President, who exercises control and supervision over respondent BCDA, should be able to correct
errors and address irregularities whenever they come to his attention. He took an oath to faithfully
execute our laws and to “consecrate [himself] to the service of the Nation.”17 Republic Act No. 7227
provides for our policy to enhance the benefits derived from respondent BCDA-administered
properties.18 Respondent BCDA’s projects should be implemented in a manner that would “maximize
the use of military camps[.]”19 It would be a violation of the President’s oath and a grave abuse of
discretion on his part
_______________
15 Id., at pp. 1043-1045.
16 Id., at p. 1046.
17 Const., Art. VII, Sec. 5.
18 Rep. Act No. 7227 (1992), Sec. 2.
19 Exec. Order No. 62 (1993), Sec. 1.4.

644
644
if, despite his knowledge, he disregards the irregularities, causing losses to the government. Inaction on
his part is, in effect, allowing the government and the taxpayers to suffer the losses.
Thus, the President decided to refer the disposition of BCDA-administered property to the Office of the
Chief Presidential Legal Counsel for study.20 Respondent BCDA also conducted a new evaluation of
petitioner SMLI’s proposal.21 This resulted in a finding that petitioner SMLI’s proposal would not yield
the best value for the government and a recommendation to terminate the competitive challenge and
proceed with the usual bidding process.22 Eventually, the President decided to subject the BCDA-
administered property to public bidding instead.23 This decision is consistent with our policy to
maximize the benefits that can be derived from BCDA-administered properties24 and our policy in favor
of public bidding.25 I reiterate:
BCDA’s acceptance of SMLI’s unsolicited proposal, the issuance of the certificate of successful
negotiations, and terms of reference, should be read in light of the preference given to public bidding,
the policy in favor of maximized use of properties, and national interest. Any person who deals with the
government also accepts the condition that the government is not bound by any provision or
interpretation that is against the law, government policies, and national interest. The government may
not agree to contract stipulations that are disadvan-
_______________
20 Rollo, p. 574.
21 Id., at pp. 633-635.

22 Id., at p. 635.
23 Id., at p. 637.
24 Rep. Act No. 7227 (1992), Sec. 2; Exec. Order No. 62 (1993), Secs. 1.4 and 1.5.
25 Exec. Order No. 62 (1993), Sec. 4.3; Rep. Act No. 9184 (2002), Secs. 3(a), 3(b), and 10; Exec. Order
No. 423 (2005), Secs. 1 and 8; Exec. Order No. 40 (2001), Sec. 2.
645
VOL. 753, MARCH 18, 2015
645
tageous to it. These are conditions that are deemed incorporated in dealings with BCDA.26
Even the government may not renege on its contractual obligations. However, there was no clear
contractual provision in this case that could limit the President’s power to terminate the competitive
challenge procedure. Respondent BCDA’s acceptance letter of petitioner SMLI’s proposal,27 the
Certificate of Successful Negotiation,28 and the Terms of Reference29 contained no provision to that
effect.30 Meanwhile, the procedure for competitive challenge under Annex C of the Joint Venture
Guidelines is a mere guideline. It is not law. It is subject to modifications that should be consistent with
law and public policy. It applies only if the parties clearly and validly agreed to adopt competitive
challenge as a procedure. Any modification or contractual provision that is marred by any form of
illegality will not vest any right. Respondent BCDA has no authority to agree to a provision that is
inconsistent with law or public policy.
A decision to accommodate petitioner SMLI’s interest at the expense of the government might give the
wrong message that we advocate coddling of private interest. It also gives a wrong message that the
President may turn a blind eye on irregularities in actions of government representatives to the
detriment of public interest. This is especially true since there is even no clear agreement that the
disposition process is limited to a specific procedure or that petitioner SMLI is entitled to the completion
of that procedure.31 “Public office is a
_______________
26 J. Leonen, Dissenting Opinion in SM Land, Inc. v. Bases Conversion and Development Authority, G.R.
No. 203655, August 13, 2014, 733 SCRA 68, 126 [Per J. Velasco, Jr., Third Division].
27 Rollo, p. 351. The letter was dated May 12, 2010.
28 Id., at pp. 65 and 70.
29 Id., at pp. 74-87.
30 J. Leonen, Dissenting Opinion in SM Land, Inc. v. Bases Conversion and Development Authority,
supra at pp. 113-117.
31 Id.
646
646

public trust.”32 We expect the President and all persons in public service to uphold the public interest.
We, therefore, expect the President to act whenever irregularities and actions that are detrimental to
the public interest come to his attention.
The public interest involved in this case is the P13 billion (approximation) that the government stands to
lose if it is forced to dispose respondent BCDA-administered property at the price proposed by
petitioner SMLI.33 This value is not speculative. According to respondents BCDA and Casanova, the
property’s value is already pegged at P100,000.00/square meter, P78,000.00/square meter, and
P500,000.00/square meter by the Bureau of Internal Revenue, Cuervo Appraisers, and the Government
Service Insurance System, respectively.34 Petitioner SMLI’s offer of P38,500.00/square meter is way
below the property’s market value. It is true that through competitive challenge, this price can be
increased. However, proceeding with the competitive challenge at this floor price means that the
government will be bound by a winning offer that, though higher than P38,500.00/square meter, is
below the property’s market value. Unlike competitive challenge, “public bidding allows the government
to set the minimum contract price[,]”35 which could more or less ensure that the government will get
the maximum benefits from the disposition of its properties.
We are not saying that government properties can be disposed exclusively through public bidding. We
are saying that this is the general rule, and other processes are exceptions. Competitive challenge may
apply if there are no other parties interested in the government property or if there is a great need to
attract the interest of private sector entities.36 It may
_______________
32 Const., Art. XI, Sec. 1.
33 Rollo, p. 1049.
34 Id.
35 Supra note 26 at pp. 123-124.
36 Id., at p. 124.

647
VOL. 753, MARCH 18, 2015
647
also apply if there is a clear showing that it would be the process that would provide more benefits to
the government. The figures above show that competitive challenge would not be the most beneficial in
this case. Proceeding with the less advantageous procedure would diminish the benefits that may be
obtained for legitimate government purposes.
Since Section 8 of Republic Act No. 7227 provides that portions of revenues obtained from the
privatization of Metro Manila military camps shall go to the Armed Forces of the Philippines’
modernization program, the housing loan program for the homeless, and other projects, this case will
have an impact on community welfare including public security. Respondents BCDA and Casanova also
raised a possible business implication of this case:
The Honorable Court’s Decision will likewise affect the manner and way by which the government and
the private sector conduct joint ventures. The current administration advocates Public-Private
Partnership, one of the models of which is a joint venture, and it is to the people’s best interest that the
Court determines pressing issues on the construction of NEDA JV Guidelines such as this one that BCDA
presents.
In its 13 August 2014 Decision, the Court stated that “the issue in this case boils down to whether or not
the BCDA gravely abused its discretion in issuing Supplemental Notice 5, in unilaterally aborting the
Competitive Challenge, and in subjecting the development of the project to public bidding.”
A definitive ruling as to the extent of applicability of the NEDA JV Guidelines, which is the governing law
for joint ventures with the government, will affect not only the Bonifacio South Property subject of this
Petition but also the conduct of ongoing and future joint ventures with the government3737 (Citation
omitted)
_______________
37 Rollo, pp. 1031-1032.
648
648
These are matters and concerns that could have been acted upon by this court En Banc. Rule 2, Section 3
of the Internal Rules of the Supreme Court38 provides that this court En Banc shall act on matters
involving “huge financial impact on businesses or [affecting] the welfare of a community[.]” Thus:
SEC. 3. Court En Banc matters and cases.—The Court En Banc shall act on the following matters and
cases:
....
(l) Division cases where the subject matter has a huge financial impact on businesses or affects the
welfare of a community[.]
Respondents BCDA and Casanova, therefore, properly filed a Motion39 dated May 14, 2013, asking for
leave of court to refer the case to this court En Banc.
However, on June 3, 2013, the Third Division denied respondents BCDA and Casanova’s Motion on the
ground that “the Court En Banc is not an appellate court to which decisions or resolutions of a Division
may be appealed pursuant to SC Circular No. 2-89 dated February 7, 1989, as amended by Resolution
dated November 18, 1993.”40
The issues raised in this case should have been properly addressed and could have been sufficiently
deliberated by this court had the case been elevated to this court En Banc.
ACCORDINGLY, I vote to GRANT the Motion for Reconsideration.
Judgment affirmed, motion for reconsideration denied with finality.
_______________
38 As amended in the Resolutions dated July 6, 2010, August 3, 2010, and September 18, 2012.
39 Rollo, pp. 854-859.
40 Id., at p. 860B.
649
VOL. 753, MARCH 18, 2015
649
Notes.—While it may be true that estoppel does not operate against the State or its agents, deviations
have been allowed; The government must not be allowed to deal dishonorably or capriciously with its
citizens, and must not play an ignoble part or do a shabby thing; Subject to its limitations, the doctrine
of equitable estoppel may be invoked against public authorities as well as against private individuals.
(Estate of the Late Jesus S. Yujuico vs. Republic, 537 SCRA 513 [2007])
The concurrence of the following requisites is necessary for the principle of equitable estoppel to apply:
(a) conduct amounting to false representation or concealment of material facts or at least calculated to
convey the impression that the facts are otherwise than, and inconsistent with, those which the party
subsequently attempts to assert; (b) intent, or at least expectation that this conduct shall be acted upon,
or at least influenced by the other party; and (c) knowledge, actual or constructive, of the actual facts.
(Planters Development Bank vs. Lopez, 708 SCRA 481 [2013]) SM Land, Inc. vs. Bases Conversion and
Development Authority, 753 SCRA 613, G.R. No. 203655 March 18, 2015

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G.R. No. 203655. March 18, 2015.

Leonen, J., Dissenting Opinion:

MOTION FOR RECONSIDERATION of a decision of the Supreme Court.

The facts are stated in the resolution of the Court.

Puno & Puno for petitioner SM Land, Inc.

Julio Ma. Edmundo D. Maningat for intervenors DND and AFP.

We are not convinced.

between SMLI and BCDA

(1) Consent of the contracting parties;

(3) Cause of the obligation which is established.

The NEDA JV Guidelines has

the force and effect of law

VIII. QUALIFICATIONS AND WAIVERS